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Radiant's Freight Market Update

Dec 7, 2023

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Transportation Capacity Grew in November, Union Pacific Plans Intermodal Terminal in Phoenix, USDOT Announces Available Infrastructure Grants Totaling $1.5 billion.


Panama Canal to continue reduction in crossings, shippers bidding millions to cross. Clarksons Research predicts a prolonged impact from transit restrictions at the Panama Canal due to reduced crossings caused by low water levels from drought. Starting in February, crossings will be restricted to just 18 per day, half the normal rate. The restrictions are expected to persist, especially with the rainy season falling between May and December. Companies are paying significantly higher amounts of up to $4 million in auctions for canal slots, compared to an average of $173,000 a year ago. The total expenditure on auctions reached $230 million through November 20, adding to the canal's standard transit fees, which can be close to $1 million depending on the vessel's size.


Port Everglades’ cargo volumes decline 6% YOY in October. Port Everglades experienced a 6% year-over-year decrease in cargo volumes to 85,649 TEUs in October, marking the eighth consecutive month of declining volumes since March. Despite the yearly decrease, the port observed an 8% increase compared to September 2023 and a 1% rise compared to October 2019. Import loads during this period were 23% higher than 2019 levels, while export loads decreased by 10%, according to Supply Chain Dive.

Georgia Ports Authority plans Northern Georgia inland rail terminal. The Georgia Ports Authority Board has approved a $127 million investment in the Blue Ridge Connector, an inland rail terminal in Gainesville, Georgia, set to open in 2026. Located 60 miles northeast of Atlanta, the terminal aims to link northeast Georgia with the Port of Savannah, serving companies in heavy equipment, food, and forest products. The funding will be a mix of internal capital, including a $46.8 million grant from the U.S. Department of Transportation Maritime Administration, according to Freight Waves. Norfolk Southern will provide access between the Gainesville terminal and GPA's Mason Mega Rail terminal in Savannah. The project, aimed at streamlining supply chains and reducing highway congestion, features hybrid electric rubber tire gantry cranes. This marks GPA's second inland rail terminal in north Georgia, complementing the Appalachian Regional Port, which opened in August 2018.


Transportation capacity grew in November. A November survey of supply chain managers showed a return to contraction territory, with transportation metrics playing a role. The Logistics Managers’ Index (LMI) recorded a reading of 49.4, a 7.1-point decline from October after three consecutive months of expansion. The index uses a diffusion index, where a value above 50 signifies expansion and below 50 indicates contraction. In November, capacity (61.8) increased by 5.2 points, utilization (50) dropped by 10.7 points, and pricing (44.2) continued its decline. According to the report, transportation capacity has been rising since April 2022. Respondents predicted a reading of 48.2 for transportation capacity one year from now, with downstream participants, such as retailers, anticipating a faster contraction (43.8). The last two weeks of the month showed somewhat improved responses (47) as last-mile deliveries of holiday goods increased. Read more from FreightWaves here.


Union Pacific plans intermodal terminal in Phoenix. Union Pacific unveiled plans to launch a new intermodal terminal in Phoenix, aiming to offer a more sustainable rail service option for the San Pedro Bay ports complex. This service is designed to cater to regional shippers and receivers seeking a faster rail solution for transporting goods to and from southern California, Kenny Rocker, the Executive Vice President of Marketing and Sales, said in a statement. The commencement of operations for the new terminal is anticipated to begin early next year, as per the announcement.


Alaska Airlines to acquire Hawaiian Airlines in $1.9 billion deal. Alaska Air (ALK) announced its acquisition of rival Hawaiian Airlines (HA) for $1.9 billion, following "several months" of negotiations, according to Alaska Airlines CEO Ben Minicucci. The deal includes assuming $900 million in Hawaiian Airlines debt. Minicucci, in a news conference, described it as a "fantastic deal" bringing together two airlines with strong regional loyalties. He highlighted that the merger will provide customers in both states with expanded domestic and international choices. The anticipated timeline for the deal's completion is between nine and 18 months. Notably, both companies will retain their respective brands, a decision made to honor the nearly 100-year legacy of the two airlines and the communities they serve, as stated by Minicucci and Hawaiian Airlines CEO and President Peter Ingram.


UPS expanding presence at Hong Kong International Airport with new facility. UPS is partnering with the Hong Kong Airport Authority (HKAA) to develop a new 20,000 sq m facility at Hong Kong International Airport. The hub, located near the Hong Kong-Zhuhai-Macau Bridge, will have direct aircraft access and the capacity to handle around 1 million tons annually. Serving as UPS Hong Kong's primary facility for processing imports, exports, and transshipments to and from Europe, the US, and other parts of Asia, the facility is a key component of UPS' expansion strategy to meet growing demand in the Greater Bay Area, according to Air Cargo News.


USDOT announces available infrastructure grants totaling $1.5 billion. The U.S. Department of Transportation announced new grants available under the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) initiative to support major infrastructure projects along commercial and commuter corridors. Transportation Secretary Pete Buttigieg emphasized that the $1.5 billion in RAISE funding aims to enhance national supply chain connectivity. The funding, available until the end of February, will aid communities in completing projects demonstrating substantial local or regional economic impact. Grant recipients will be announced before July, according to the DOT.


The Radiant Network's supply chain and logistics updates provide valuable insights on freight trends, customs regulations, global news, economics, tech, and more. The Radiant Network includes the brands Radiant World Trade Services, Radiant Global Logistics, Radiant Canada, Radiant Road & Rail, Adcom, Airgroup, SBA, and Distribution By Air.


Radiant World Trade Services is a part of Radiant Logistics, Inc. [linked] (NYSE American: RLGT), a publicly traded third-party logistics company that provides technology-enabled global transportation and value-added logistics solutions to a diverse account base. They offer comprehensive services including freight forwarding, truck and rail brokerage, warehouse and distribution, customs brokerage, order fulfillment, inventory management, and technology services. Radiant has an extensive network of offices throughout North America and other key markets worldwide.